Enbridge Income Fund HoldingsENF.TOBUYNov 03, 2017Stock price when the opinion was issued
As of Nov 10, 2018. Market Open.
Enbridge wants to buy ENF to simplify their corporate structure. In the States, Enbridge offered a small premium, while in Canada, they offered a premium. He suspects the directors of ENF-T are waiting for a higher premium (or that's what he would do). Pays a higher yield than Enbridge Inc. but lacks the dividend growth potential.
This got pounded in the last few days. Moody's downgraded them a couple of weeks ago on line 3 execution risks. Very cheap. Trading at 11X. The dividend is safe-ish. He is modelling a 6% compounded growth rate on EPS over the next couple of years. One of the risks is what happens in Minnesota with the Minnesota regulator, but construction has already begun in Canada and Wisconsin. These pipelines are necessary. Probably a buying opportunity at these levels.